A Brooklyn Hospital, Low on Cash, Says It May Need a State Bailout

Interfaith Medical Center says it is running out of money to make its payroll.Credit
Christopher Gregory/The New York Times

A small community hospital in Brooklyn is running out of cash and fears it will not be able to make its payroll or pay its vendors by September without a state bailout, the hospital’s administrators said this week.

The hospital, Interfaith Medical Center, serves a largely Caribbean-American and poor population in Bedford-Stuyvesant and north-central Brooklyn. Interfaith’s chief executive, Luis Hernandez, said this week that while the hospital was making payroll and paying vendors, it had only 18 days to 20 days of cash on hand and it had not been able to pay interest on its state-backed mortgage since November.

The chairman of Interfaith’s board of trustees, Nathan M. Barotz, blamed another Brooklyn hospital, Wyckoff Heights Medical Center, in Bushwick, for Interfaith’s plight; he accused Wyckoff’s administration of dragging its heels on a plan to shore up operations by combining the operations of Interfaith, Wyckoff and Brooklyn Hospital Center, in Fort Greene.

“Because it took so long to figure out where Wyckoff stood in this formula,” Mr. Barotz said, “we lost an incredible amount of time, and we as an institution don’t want to be penalized for that.”

In November, a Cuomo administration panel proposed integrating the operations of Wyckoff and Interfaith, which the panel described as being in danger of immediate financial collapse, with those of Brooklyn Hospital, which was considered more stable. The panel said that combining the three hospitals in a group led by Brooklyn Hospital would strengthen the two weaker institutions and could reduce costs by pushing patients toward primary care rather than hospital care and eliminating the duplication of some specialized services among the three.

Mr. Barotz said that Interfaith — which has 287 beds, 120 of them psychiatric — needed $10 million to $30 million to keep going, depending on how long it had to wait for a reorganization. He said Interfaith officials recognized that the state, given its own financial constraints and policy mandates for less hospital-centered care, was loath to subsidize ailing hospitals, as it did with St. Vincent’s Hospital Manhattan before it went bankrupt and closed in 2010. But he contended that if an infusion of cash would keep Interfaith open until it could be reconfigured, “that would be a relatively inexpensive price to pay.”

James Introne, the Cuomo administration’s deputy secretary for health, said that the State Health Department had been watching the situation at Interfaith closely, and that he believed the hospital would be able to hold on until a plan to integrate with Brooklyn Hospital was developed.

Photo

Nathan M. Barotz, center, the chairman of Interfaith’s board, with Luis Hernandez, left, Interfaith’s chief executive, said the hospital needed $10 million to $30 million to keep going.Credit
Ozier Muhammad/The New York Times

“It’s a question of when they’re going to run out of cash,” Mr. Introne said. “Neither the Health Department nor they have indicated to me that there’s an urgent situation there.”

In a twist, one member of the Cuomo administration panel was Ramon Rodriguez, a former managed-care executive and a former State Parole Board chairman in the administration of Gov. Andrew M. Cuomo’s father, Mario. In late December, after the panel made its recommendations, Wyckoff’s trustees ousted their chief executive, who had been caught up in a conflicts-of-interest investigation, and replaced him with Mr. Rodriguez.

Asked if he was repudiating the plan he had supported as a panel member, Mr. Rodriguez said that “people make mistakes,” and that he had since been “educated” by his trustees and medical staff. He said he was interested in collaborating on some operations, like psychiatry, with Interfaith, but believed that Brooklyn Hospital Center served a different market and would steal market share from Wyckoff without offering enough in return. But he said he would not rule out working with Brooklyn Hospital.

Mr. Rodriguez said that Wyckoff had increased its cash flow by recapturing some billings from doctors and by recruiting new doctors, and that his focus was on attracting more middle-class, insured patients from Queens, which already accounts for half of Wyckoff’s business. The hospital is close to the Queens border.

As if contemplating a marketing slogan, Mr. Rodriguez suggested that the area around Brooklyn Hospital was a good place to eat Junior’s cheesecake and to go to the Brooklyn Academy of Music, but that Wyckoff was the place where people in Bushwick and south Queens would go to get health care. “Geography is destiny,” he said.

Dr. Richard Becker, the chief executive of Brooklyn Hospital Center, declined to comment on whether he could see integrating with Interfaith but not with Wyckoff. As to whether Brooklyn Hospital was trying to steal from Wyckoff’s market share, he said: “I guess everybody’s entitled to their own perspective. It’s a very dynamic market.”

Mr. Barotz said that at a meeting in May between state officials and hospital executives, Mr. Rodriguez declared that he was not interested in combining operations with Brooklyn Hospital and Interfaith. At that point, Mr. Barotz said, “Jim Introne said, in essence, ‘We wish you the best,’ and he started to get out of his chair,” and Mr. Rodriguez relented.

But since then, Mr. Barotz said, Mr. Rodriguez has expressed opposition to Brooklyn Hospital’s being the lead hospital and has balked at sharing financial information, making it all but impossible to come up with a realistic plan.

“They won’t come to the table,” Mr. Barotz said. “They’re off on their own.”

Mr. Introne said Wyckoff’s decision was “unfortunate,” adding, “The prospects for assuring the viability of all of those institutions would have been enhanced to the extent that Wyckoff was willing to participate in seeking a common solution, but they declined.”

A version of this article appears in print on August 3, 2012, on page A15 of the New York edition with the headline: A Brooklyn Hospital, Low on Cash, Says It May Need a State Bailout. Order Reprints|Today's Paper|Subscribe